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Future Global Shocks

Improving Risk Governance

Recent global shocks, such as the 2008 financial crisis, have driven policy makers and industry strategists to re-examine how to prepare for and respond to events that can begin locally and propagate around the world with devastating effects on society and the economy. This report considers how the growing interconnectedness in the global economy could create the conditions and vectors for rapid and widespread disruptions. It looks at examples of hazards and threats that emerge from the financial world, cyberspace, biological systems and even the solar system, to reflect on what strategic capacities are called for to improve assessment, mapping, modelling, response and resilience to such large scale risks.

Definition and drivers of future global shocks

Extremely disruptive events, such as earthquakes, volcanoes, financial crises and political revolutions destabilise critical systems of supply, producing economic spillovers that reach far beyond their geographical point of origin. While such extreme events have been relatively rare in the past, they seem poised to occur with greater frequency in the future. Global interconnections accompanying economic integration enable some risks to propagate rapidly around the world. What do governments and multinational businesses need to do to prepare for the ripple effects of such events and to limit their negative consequences? The OECD International Futures Programme has completed an 18-month study on future global shocks, which took stock of the challenges in assessing, preventing and responding to several potential global risks. The working definition of “Global Shock” and several of the most important enabling drivers are presented here.